Working With The New Bankruptcy Law!

submitted: Aug 12th 2008 | by: ChrisSafin | Total views: 1 | Word Count: 439 | PDF View | Print Article

In recent years with the new bankruptcy law now in place, it has become far harder to apply for bankruptcy and also the prices of bankruptcy attorneys have gone up, since there is now more work for them to do.

So what are the main changes that have been made to the new bankruptcy law?

In order to make sure that only the most in need people qualify for bankruptcy, the government has created what they call the means test.

In the Means Test your monthly income is considered, minus certain expenses that are allowed. If you come out above the ?median income? you will have to file for Chapter 13 bankruptcy.

There are a series of strict guidelines set up by the IRS dedicated to your allowable expenses. For instance, you will be limited to 800 $ for all your housing costs each month and you will also be limited to 200 $ each month to pay for your food.

It is essential to understand that there are both state and federal bankruptcy laws. You will find that some state laws are more lenient than others.

You will be forced by the IRS to pay out around about 75 $ on a credit counseling course that you will have to attend within 180 days from the date you first file for bankruptcy.

Under the all new bankruptcy law there is now more paperwork that you will have to do so that you can prove that bankruptcy is necessary.

Some of the things that you are going to have to provide the IRS with will include: a list of all your unsecured and secured creditors; a detailed list of your expenses and your monthly income; liabilities and assets; your most recent tax return; your photo ID and pay stubs.

Thanks to the new law, you are going to have to pay a considerable amount more on your bankruptcy attorney. This is thanks to the fact that there is now a whole lot more work for your bankruptcy attorney to do.

The interpretation of the new bankruptcy law

While there is nothing saying that you have to employ a lawyer, it is a wise decision to do so. This may actually save you a lot of time as well since if you forget to file certain documents your case can be dismissed making you have to start all over again.

The one thing that you must remember is that bankruptcy, no matter the circumstances, is always your absolute last option. If you file for bankruptcy it will stay on your public record for up to 10 years, so if you can avoid it you will be most likely better off.

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